An end to partisan warfare?

Conservatives and progressives have contributed to making the bureaucracy's leadership a political battleground.

By Richard Mulgan

7 August 2018 — 12:11am

The recent appointments of Phil Gaetjens to succeed John Fraser as Treasury secretary and Peter Woolcott to replace John Lloyd as public service commissioner mark the end of the Abbott era in the upper echelons of the Australian Public Service. Abbott, in appointing Fraser and Lloyd, as well as Michael Thawley at the Department of the Prime Minister and Cabinet, made a point of choosing people with known pro-Coalition or pro-business sympathies to lead central agencies. Thawley left PM&C soon after Malcolm Turnbull took over the prime ministership, while Lloyd and Fraser only recently threw in the towel.

Turnbull's earlier replacement of Thawley with Martin Parkinson, a respected career public servant who had fallen foul of Coalition conservatives because of his role in managing climate change policy, appeared to signal a return to less partisan appointments, a pattern followed in filling subsequent, less high-profile vacancies.

The incoming public service commissioner, Peter Woolcott.Credit:Jason South

Taken together, the two latest key appointments continue this moderating trend but not without some concessions to conservative sensibilities. In particular, Gaetjens is a subject of partisan controversy and his appointment is a partial victory for conservatives. Woolcott, on the other hand, represents a welcome reversion to apolitical appointments.

Though Gaetjens and Woolcott currently serve as ministerial chiefs of staff (for the Treasurer and Prime Minister respectively), Woolcott only recently took up this role after a career as an apolitical diplomat, and in accordance with Turnbull's well-known penchant for using career public servants as advisers.

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Gaetjens, on the other hand, spent much of his career as a Coalition adviser, first for Peter Costello and latterly for Scott Morrison. He could easily be seen as continuing the conservative policy of politicised appointments. Certainly, this was the view taken by the government's opponents, for whom the issue of an apolitical APS has become a key battlefield in the partisan ideological contest.

"The Liberals are addicted to stacking positions in government with their mates," Opposition Leader Bill Shorten said. Neither he nor the shadow treasurer, Chris Bowen, would commit to continuing Gaetjens if the Labor Party won the next election. Bowen also objected to two other senior appointments of former Liberal staffers, announced soon after: Michael Brennan, to head the Productivity Commission, and Simon Atkinson, to head Treasury's fiscal group (a deputy secretary-level role). Bowen promised that Labor would end Treasury's politicisation and restore it to "its rightful place as the premier central policy agency".

Morrison, who must have played a central role in the appointment of his former chief of staff to head his department, relished the chance of some partisan argy-bargy and another opportunity to attack Shorten's "smallness of character". Gaetjens, he said, had more budget and policy experience than the whole of Labor's front bench, an irrelevant non-sequitur worthy of parliamentary question time.

The incoming Treasury secretary, Phil Gaetjens.Credit:Elesa Kurtz

The partisan commentariat also happily joined in. Progressives deplored the political nature of the appointments and lamented Treasury's decline as a source of objective, non-political advice. As so often in the culture wars, the moralistic outrage of the progressives merely reinforced the convictions of the right. Conservatives argued that Gaetjens' time as a Liberal staffer was irrelevant and that his economic policy and technical skills were first-class. Gaetjens himself entered the debate, fronting up to a sympathetic interview in the Financial Review, in which he claimed to be "more at the policy end of the spectrum than the political end".

Those Gaetjens supporters who argue that his political history and connections were irrelevant to his appointment were being disingenuous. Many conservatives in the Coalition – including, one suspects, the Treasurer himself – would have welcomed his partisan pedigree. For the conservatives, who nurture deep suspicions of progressive bias in the career bureaucracy, having a background in either the party or among one of the party's natural constituencies, is a key qualification. No matter how smart and professional Gaetjens may be, he would not have satisfied the party hardliners otherwise. By the same token, if the government had wished to make a clearly non-political appointment to the Treasury, it would have chosen someone with a more balanced CV.

In the event, Gaetjens may well disappoint his partisan backers and also prove his critics wrong, by acting much like any other experienced career public servant. He will have every incentive to do so, not only to gain the respect of his departmental colleagues and the wider community of professional economists, but also with an eye to possibly retaining his position if Labor wins the next election.

He will know that Labor, in contrast to the Coalition, is committed to retaining incumbent secretaries on regaining office, a policy introduced by Kevin Rudd in 2007 and applied, for example, to Industry Department secretary Mark Paterson, a John Howard appointee who had previously headed the Australian Chamber of Commerce and Industry. In spite of Paterson's obviously pro-business background, he went on to serve Labor ministers effectively for another four years. (In replacing him, however, Labor abandoned the high moral ground, appointing a high-profile Labor mate, Don Russell, Paul Keating's former chief of staff.)

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Labor doubled down on continuing the tenure of incumbents in its opposition to Abbott's sackings in 2013, since when the issue has firmed up as part of the wider progressive support for an apolitical public service. Unsurprisingly, Labor frontbenchers have refused to guarantee retaining Gaetjens' services if they win office. They could hardly offer him immediate endorsement while savaging his appointment. But if he keeps his head down and avoids partisan controversy, Labor would find it politically difficult to dismiss him, a point that seems to have eluded most commentators but will not have escaped Gaetjens himself.

As for Treasury's alleged politicisation, the department certainly no longer enjoys the preeminent position within the bureaucracy it once held. Treasury has always played a double role: as a standard department loyally serving the minister and government of the day, and as an independent source of objective economic data and analysis. In recent years, the independent research function has diminished in importance and the department has become more exclusively an instrument of government policy.

A number of structural factors have been involved in this development. One is the steady reduction in staffing, imposed by both Labor and Coalition governments. Another is the growing accessibility of senior public servants, which brings them more into the public eye and encourages them to act more as spokespeople for government policy. A third factor is the greater openness of government through freedom of information law, which discourages department researchers from undertaking analysis that is likely to embarrass the government. It is over 10 years since then Treasury secretary Ken Henry warned against extending FOI's purview, saying it would discourage critical research. He was not in the business, he said, of making bullets for the opposition to fire at the government.

None of these trends had anything to do with the political affiliations of individual secretaries. Critics of Gaetjens' appointment who link it to Treasury's changing role and nostalgia for a bygone era are drawing a long bow indeed. Similarly, Labor calls to restore the Treasury to its former preeminent role are wishful thinking. It is more sensible to recognise that the electronic media age has made all senior public servants, to some extent, more politicised in the sense that they have become more concerned with both framing and delivering the government's partisan message. In private, ministers still need their officials to give them frank advice. But in public debate, independence and objectivity are better sought from government agencies that are legally at arm's length from ministers. The Bureau of Statistics is one such agency, as are the Productivity Commission and the Parliamentary Budget Office. These are the agencies whose resources and jurisdiction should be given priority, ahead of Treasury's.

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Though the significance of Gaetjens' appointment should not be overstated, it still reflected a conservative preference for choosing senior secretaries with pro-Coalition credentials. Interest then naturally turned on the government's choice of a successor to Lloyd as public service commissioner. Would it be another conservative warrior? Or someone with impeccably non-partisan credentials? Labor ramped up its campaign, for instance, with an op-ed from senator Jenny McAllister attacking Lloyd and advocating a politically independent appointment.

There was a risk that the issue had become so polarised between the partisan-supporting right and the neutral-supporting left that the government would feel obliged to choose one of its own. To opt for an impartial commissioner could have been seen as caving in to Labor. Indeed, Labor seemed to be goading the government into making a partisan choice as a means of keeping the issue alive.

Fortunately, Turnbull ignored such provocation and did the right thing by the Public Service Commission. As an endorsement, the Community and Public Sector Union, Lloyd's most consistent opponent, welcomed the appointment of Woolcott, a long-time federal public servant. Some of the government's more one-eyed critics refused to let the controversy die and persisted in labelling Woolcott a government stooge. But most reasonable observers will be thankful that the Lloyd chapter is closed, with the promise of a less partisan future for the Public Service Commission and for the public service in general.